4 Main Cryptocurrency Challenges in 2021
The cryptocurrency has been around for over 10 years, although some of its predecessors appeared long before 2009. Recall, for example, the cypherpunk movement. However, despite the burgeoning adoption of digital currencies, they still face some challenges in 2021. We will tell you what problems cryptocurrency needs to solve in order to join other legitimate currencies in the world of finance.
Liquidity and exchange rate fluctuations
The rise in prices in the cryptocurrency industry has always been considered a positive indicator, especially in the eyes of investors. But in order to become a reliable store of value, stability is needed above all. And this is still the main factor pointed out by all global regulators. Bitcoin, in their understanding, is an extremely volatile investment of funds, however, like other digital currencies.
The mass of tokens appearing and disappearing from the market does not help the situation, having a negative impact on its overall stability. It still needs at least minimal regulation to reduce fluctuations. Although, as most enthusiasts rightly point out, the arrival of regulators means the death of what was at the heart of Satoshi Nakamoto's idea of a decentralized future and the absence of financial intermediaries.
Also, do not forget that in some countries with unstable fiat, the digital currency has become a partial or even full replacement for it.
Lack of knowledge about the structure of cryptocurrencies is one of the main problems of the appearance of a storm of criticism against the tokens themselves and those who use or develop them. While some people are eyeing outright "shitcoins", others day after day criticize such industry mastodons as Bitcoin or Ethereum.
The industry is rapidly evolving, so it is important to close the education gaps in digital currencies just as quickly, targeting people of all ages. Only then can tokens achieve even wider acceptance, becoming a valuable technological experience for humanity.
Speculation and money laundering
The main thesis of most critics of cryptocurrencies is that they have gained high popularity in the criminal environment. Since some tokens hide transaction participants from the watchful eyes of justice, cybercriminals regularly use tokens to sell illegal goods, services, and money laundering. Unfortunately, without close monitoring by security officials and tracking crypto whales, this problem will be extremely difficult to solve.
Another important point is the image of the crypto community as a “gathering of speculators”. The reason for this is the newly-minted "crypto fans" who come to the industry not so much for the idea of a high-tech future, but solely for the purpose of making money.
Yes, everyone likes getting paid. But is it worth for the sake of momentary gain to abandon a bright and promising future and the free exchange of money without the participation of centralized financial structures? Hardly.
Ease of use
Cryptocurrency, unlike fiat, is a more complex type of payment. Consequently, it will simply not be accepted by those who do not understand enough or are not at all interested in technology. For it to become truly scalable, tokens must be compatible with all kinds of platforms and software. Until this is possible, cryptocurrencies will not be able to become the most convenient and fastest type of transactions on a global scale, remaining in the eyes of society "the lot of a handful of geek-programmers."
Digital currencies will not disappear anywhere from our lives, but they have to go a thousand steps before being adopted around the world, facing not only international but also local regulators who are not ready to accept the fact that the future has already arrived.